All amounts in Canadian dollars unless specified.
CALGARY, September 15, 2025 /CNW/ – MEG Energy Corp. (TSX: MEG) (“MEG”, or the “Company”) announced today that its Board of Directors (the “MEG Board”) has reaffirmed its unanimous recommendation to the holders (“MEG Shareholders”) of MEG common shares (“MEG Shares”) to vote FOR the Cenovus Transaction (as defined below) and recommends that MEG Shareholders REJECT the revised unsolicited Strathcona Resources Ltd. (“Strathcona”) offer (the “Revised Strathcona Offer”).
On August 22, 2025, MEG announced it had entered into an arrangement agreement (the “Arrangement Agreement”) with Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) (“Cenovus”) under which Cenovus will acquire all of the issued and outstanding MEG Shares in a transaction that values MEG at $28.18 per share on a fully prorated basis at Cenovus’s closing share price on September 12, 2025, representing an enterprise value of approximately $8.2 billion, including assumed debt (the “Cenovus Transaction”).
The Cenovus Transaction provides MEG Shareholders with choice to elect their preferred form of consideration and is to be completed by way of a plan of arrangement under the Business Corporations Act (Alberta) where each MEG Shareholder will be entitled to elect to receive:
in all cases, subject to rounding and proration based on the maximum amount of cash and the maximum amount of Cenovus Shares to be provided to MEG Shareholders, as set out in the Arrangement Agreement.
On a fully pro-rated basis, consideration per MEG Share represents approximately $20.44 in cash and 0.33125 of a Cenovus Share.
On September 10, 2025, Strathcona filed a Notice of Variation, Change and Extension in connection with its Revised Strathcona Offer, offering MEG Shareholders 0.80 of a Strathcona common share (each whole share, a “Strathcona Share”) per MEG Share. As part of the proposal, Strathcona indicated that if the Revised Strathcona Offer is successful, MEG Shareholders would be eligible to receive a proportionate share of the potential “Special Distribution” by Strathcona totaling $2.142 billion, the payment of which remains subject to various conditions and approvals. The Special Distribution would equate to approximately $4.18 per MEG Share at the offered 0.80 exchange ratio. The Special Distribution, if completed, does not deliver incremental consideration to MEG Shareholders as it would significantly increase the leverage of the combined company and reduce its equity value by $2.142 billion, thereby negatively impacting the price of Strathcona Shares that MEG Shareholders would receive under the Revised Strathcona Offer.
“The Revised Strathcona Offer remains fundamentally unattractive for MEG shareholders because it fails to address or adequately compensate for the significant risks embedded in Strathcona Shares,” said James McFarland, Chair of the MEG Board. “MEG shareholders would be exposed to inferior assets, an unproven track record, an overvalued Strathcona share price, significant overhang risk, and governance risk.”
McFarland continued: “In contrast, the Cenovus Transaction delivers an attractive price, upside potential, substantial cash, and value certainty that MEG Shareholders deserve. The Board unanimously recommends that MEG Shareholders vote FOR the Cenovus Transaction.”
“Through our engagement with MEG Shareholders, we have heard overwhelming acknowledgement of the industrial logic of the Cenovus Transaction,” said Darlene Gates, President and CEO of MEG. “We have also heard the majority of MEG institutional shareholders express concerns around acceptance of Strathcona share consideration and the resultant impacts on the trading of the combined company’s shares, with recognition of Strathcona’s inferior asset quality, unproven track record, inflated share price, and the risks associated with WEF ownership.”
The Revised Strathcona Offer consists of unattractive all-share consideration. The MEG Board recommends that MEG Shareholders REJECT the Revised Strathcona Offer for the following key reasons:
“We’re going to have to return all of the capital to our investors roughly over the next three years.”
– WEF’s Managing Partner and CEO, Strathcona’s November 2024 Investor Day
While Strathcona referenced possible lock-up agreements, it has provided no meaningful detail, including on scope, such as whether distributions to WEF’s limited partner investors would be restricted, duration, and the parties to such lock-up agreements, and MEG cannot determine whether the lock-up mitigates or merely delays the risks to MEG Shareholders. This overhang risk remains significant and unresolved.
Third party equity research report published on September 9, 2025.
The MEG Board’s reasons for reaffirming its recommendation to vote FOR the resolution approving the Cenovus Transaction include:
The process involved outreach to over 15 parties, including oil and gas industry participants and financial sponsors in Canada, the U.S., and internationally, and the publicly announced process gave other parties the opportunity to express interest. MEG received three non-binding proposals, including one from Cenovus. Through rigorous negotiations, MEG secured an increase in the Cenovus offer from $25.00 to $27.25 per MEG Share (at announcement) and increased the equity component from 20% to 25%.
Additional information can be found in the Investor Presentation, which is available at www.megenergy.com/offer-update.
The MEG Board’s determination to REJECT the Revised Strathcona Offer followed careful consideration, including advice from its external financial and legal advisors, the unanimous recommendation of the Special Committee of the MEG Board (the “Special Committee”), and have heard feedback from the majority of MEG institutional shareholders expressing strong aversion to receiving Strathcona Shares. After considering such advice, the MEG Board has unanimously reaffirmed its recommendation that MEG Shareholders vote FOR the resolution approving the Cenovus Transaction at the Meeting (as defined herein) and REJECT the Revised Strathcona Offer.
To reject the Revised Strathcona Offer, simply take no action. If you have tendered your MEG Shares to the Revised Strathcona Offer and wish to withdraw, ask your broker or contact Morrow Sodali (Canada) Ltd. (“Sodali & Co.”), the information agent retained by MEG, to assist you with that process. You can reach Sodali & Co. by toll-free phone call in North America to 1-888-999-2785, or to 1-289-695-3075 for banks, brokers, and callers outside North America or by e-mail at [email protected].
MEG Shareholders will vote on the Cenovus Transaction at a special meeting (the “Meeting”) that will be held on October 9, 2025, at 9:00 a.m. (Calgary Time), in person at Brookfield Place, 225 – 6th Avenue S.W., Suite 1400, Calgary, Alberta or through a live audio webcast accessible at https://meetings.lumiconnect.com/400-560-917-636.
MEG filed an information circular (“Circular”) on September 12, 2025, providing further details on the Meeting and the Cenovus Transaction, including voting instructions, and MEG Shareholders are encouraged to review the Circular. MEG Shareholders are urged to vote well in advance of the Meeting.
Accompanying the Circular is a letter of transmittal and election form containing instructions on how MEG Shareholders can elect their consideration and deposit their MEG Shares. Failure to complete a letter of transmittal and election form prior to the election deadline, being 4:30 p.m. (Calgary Time) on October 7, 2025 (or if the Meeting is adjourned or postponed, no later than 4:30 p.m. (Calgary Time) on the business day that is two business days prior to the date on which the Meeting is reconvened or held, as the case may be) will result in a deemed election by such MEG Shareholder to receive: (i) $27.25 in cash per MEG Share for 75% of the MEG Shares held by such MEG Shareholder; and (ii) 1.325 Cenovus Shares per MEG Share for 25% of the MEG Shares held by such MEG Shareholder, subject to rounding and pro-ration based on the maximum amount of cash and Cenovus Shares set out in the Arrangement Agreement and as described in the Circular.
The information provided herein is supplemental to the information contained in the Circular filed on September 12, 2025 and is being disseminated to MEG Shareholders in accordance with the terms of the Interim Order granted by the Court of King’s Bench on September 9, 2025, a copy of which is appended to the Circular as Appendix C.
INVESTORS
Sodali & Co
Toll free in North America at 1-888-999-2785, or at 1-289-695-3075 for banks, brokers, and callers outside North America or by email at [email protected].
MEDIA
Jim Campbell
Vice President, Communications and External Relations
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E [email protected]
MEG Energy Corp. (TSX: MEG) ( “MEG”, or the “Company”) today announced that it has entered into an arrangement agreement (the “Arrangement Agreement”) with Cenovus Energy Inc. (TSX: CVE) (NYSE: CVE) (“Cenovus”) under which Cenovus will acquire all issued and outstanding common shares of MEG (“MEG Shares”) in a transaction that values MEG at $27.25 per MEG Share, (the “Purchase Price”).
The proposed transaction (the “Transaction”) to be completed by way of a plan of arrangement under the Business Corporations Act (Alberta) represents a MEG enterprise value of $7.9 billion, inclusive of assumption of MEG’s debt, and is expected to close early in the fourth quarter of 2025, subject to customary approvals.
Under the terms of the Transaction, each holder of MEG Shares (a “MEG Shareholder”) will have the option to elect to receive for each MEG Share:
On a fully pro-rated basis, consideration per MEG Share represents approximately $20.44 in cash and 0.33125 of a Cenovus common share. The value of consideration payable under the Arrangement Agreement represents a mix of 75% cash and 25% Cenovus Shares. The Transaction is fully financed by Cenovus and is not subject to any financing conditions.
On June 16, 2025, MEG initiated a strategic review of alternatives (the “Process”) which sought to surface an offer superior to the Company’s compelling standalone plan. The Process was approved by the MEG Board which authorized a special committee comprised of independent members of the MEG Board (the “Special Committee”) to oversee the Process.
After evaluating several alternatives, including continuing with MEG’s previously announced standalone development plan, a comprehensive review of the unsolicited offer (“Unsolicited Strathcona Offer”) from Strathcona Resources Ltd. (“Strathcona”), and proposals received in the Process, the MEG Board has determined that the Transaction is in the best interests of MEG and its stakeholders.
The MEG Board, informed in part by the recommendation of the Special Committee, and after considering advice from its external financial and legal advisors, has unanimously:
All directors and executive officers of MEG have entered into voting support agreements pursuant to which they have agreed, among other things, to vote their MEG Shares in favour of and otherwise support the Transaction, subject to the provisions of such agreements.
MEG shareholders will vote on the Transaction at a special meeting (the “Meeting”) expected to be held in early October 2025. The Transaction requires approval by at least 662/3% of the votes cast at the Meeting by MEG Shareholders represented in person or by proxy. Details of the Transaction and the required shareholder vote will be included in an information circular (“Circular”) that MEG expects to mail to the MEG Shareholders and file on SEDAR+ (www.sedarplus.com) in mid-September 2025. All MEG Shareholders are urged to read the Circular once available as it will contain additional important information concerning the Transaction including the deadline for making elections to receive cash and/or Cenovus Shares.
The Transaction is subject to a number of other conditions including certain required regulatory and government approvals, as further detailed in the Arrangement Agreement, a copy of which will be filed on SEDAR+ (www.sedarplus.ca).
If you have already tendered your MEG Shares to the Unsolicited Strathcona Offer, you can withdraw your MEG Shares by contacting your broker or Sodali & Co., by toll free phone call in North America to 1-888-999-2785, or to 1-289-695-3075 for banks, brokers, and callers outside North America or by email at [email protected].
MEG Energy Urges Shareholders to Take NO ACTION
MEG Energy Corp. (TSX:MEG, “MEG”, or the “Company”) announced on June 16, 2025, that its Board of Directors (the “Board”) has determined that Strathcona Resources Ltd.’s (“Strathcona”) unsolicited bid to acquire all of the issued and outstanding MEG shares is inadequate, opportunistic, and NOT in the best interests of MEG or its shareholders.
On May 30, 2025, Strathcona made a formal offer to acquire all of the issued and outstanding MEG shares it does not already own for a combination of 0.62 of a Strathcona share and $4.10 in cash per MEG share (the “Offer”). The Offer remains open until September 15, 2025.
MEG’s Board formed a Special Committee to conduct a thorough evaluation of the Offer with the assistance of financial and legal advisors. Following this review and on the recommendation of the Special Committee, the Board has concluded that the consideration to be received by shareholders under the Offer is inadequate, from a financial point of view, to shareholders, is not in the best interests of the Company or its shareholders, and unanimously recommends that shareholders REJECT the Offer by taking no action and NOT TENDER their shares.
NO ACTION is required to reject the Offer.
If you have already tendered your shares to the Offer, you can withdraw your shares by contacting your broker or Sodali & Co, the information agent retained by MEG, by toll-free phone call in North America to 1-888-999-2785, or to 1-289-695-3075 for banks, brokers, and callers outside North America or by e-mail at [email protected].
The Board filed its Directors’ Circular on June 16, 2025, which provides information for shareholders about MEG’s prospects and the Board’s analysis, deliberations and recommendations. The Directors’ Circular is available below and on SEDAR+ at www.sedarplus.ca. Additional information can be found in the Investor Presentation, which is also available below.
In its Directors’ Circular, the Board details the reasons for its recommendations, including:
As noted in the Directors’ Circular, the Board also considered the following:
Incident notification – April 30, 2016 – Meg Energy announces that today, at approximately 08:15 hrs, during work carried out on a natural gas well near the village of Edmonton in Alberta.